tv Fast Money CNBC February 5, 2013 5:00pm-6:00pm EST
proposal in order to delay the sequestration. spending cuts due on march 1st. he's leaving it to congress to figure it out, what that budget would look like. but he made it clear, it better include a bunch of new tax revenue. the president warning not doing this puts our economic recovery at risk. but there are a few questions all americans should be asking tonight. first, why a short-term budget? we have not had any budget for four years running. even though the law requires we have one as a country, isn't it high time we had a long-term budget plan? and that plan, of course, must finally address spending. the president himself has said we have kicked the can down the road on that front. and now we are at the end of the road. he's right. and addressing this issue begins and ends with the sober and realistic budget. house ways and means committee dave camp just told us a minute ago we must move forward on spending cuts and tax reform. he's proposing a plan to lower
corporate rates. bottom line, bottom line must come together. if you want an idea of how far we are on the debt and deficit front, we've gone so far, just look at the congressional budget office report. it says our deficit for this year will only be $845 billion. this is considered good news, because for the past few years, it's been over a trillion dollars. when spending more than $800 billion than we take in is viewed as progress, it's time to get serious. let's hope for the good of our country, our lawmakers do just that. have a great night, everybody. "fast money" begins right now. live from the nasdaq market site in new york city's times square, i'm melissa lee. magic kingdom. disney's been the happiest place on earth for investors. why mickey mouse is still a good bet. tech troubles. it's the worst sector so far this year. tom picks that benefit from the
mobile revolution. and blackberry brawl. can the momentum continue for blackberry? dan and guy duke it out in a smartphone street fight. first, let's get straight to breaking news here. shares of hewlett-packard surging on reports that the board is studying potential breakup scenarios. jon fortt has the latest. fact or fiction here? >> melissa -- fact, but not extremely exciting fact. the business new side courts reporting this. not a lot new i see in this report, saying that the board is exploring a breakup of some divisions, among other scenarios to maximize shareholder value. doesn't seem they've ever stopped analyzing these scenarios. but the spin off of the pc business is something that meg whitman keeps ruling out. earnings call after earnings call. nothing clear anything about that has changed as of this point. but of course this attention comes back to hb on the day when the news abdel going private is breaking. hp can expect a lot more such str
strut scrutiny. melissa? >> thank you, jon. hp shares backing off from the pop it saw immediately. let's get the reaction from our traders at this point. and it was interesting because you said, fiction maybe now, but mable not fiction in six months. >> where there's smoke, there's fire. the stock performance since that november 18th release has been unbelievable. we talked about it. don't buy it now, north of 17. hopefully you've been in it. i still think is a stock that continues to go higher. >> the weird thing is, hp had a statement out and did not seem like they were planning for any sort of a breakup. >> they were kind of gloating and they were getting back at michael dell who made fun of them when they said they were going to spin out their pc business in 2011. this is going to leave investors and customers and innovation at the curb, meaning dell will, through this leverage buyout. they are going to leave is a lot of low-hanging fruit for hp to step in. that's probably a better attitude to take, when you look at what hpq has ahead of them. >> b.k., buy or sell at this point? >> not at this point, but i'm in the guy camp.
>> let's get to the top four trades. guy, how are you riding this rally? >> big cap pharma. nobody's been talking about it. eli lilly, the valuation is stretched but i think they go higher from here. >> dan? >> yeah, you know, i'm not a buyer of the rally up here, we're approaching five-year highs, all-time highs in the dow here. i think you have to be really cautious. i bought some sds, the spy double short etf this afternoon. >> b.k.? >> yeah, i like to go outside of the s&p 500. look to the metals. platinum, pplt. you have mine closures in south africa. it is a supply constrained market. they have demand from the auto side of it. i still like pplt. >> and tim. >> a better day in european politics, soap opera was at least a chance for us to short. sell france, sell dax. if you notice what's going on with vol, we've had 1% move in the s&p, it's going higher. buy cheap vol. on a day when things are up, you should be selling this market by
buying more puts. >> all right, let's talk about apple here. is it time to get back in? professor -- i probably butchered that name. >> huh? >> easy for you to say. >> see what he has to say. all right, we didn't have a sound -- basically, he said that apple should be valued at about a $650 a share. he doesn't know if it's going to get there, but approximately, you know, that would be the level he says. goldman sacks out with a note saying apple has more upside than any stock that it covers when it looks at the price targets compared to where the stock is now. so, with today's big surge, in the session, could apple be the next comeback kid? >> the answer is obviously yes. i would push back and say, i still think it's no man's land here. i said it before. maybe above $485. but what people don't say, i think, is apple -- the apple products being commoditized? i would argue the chance of that happening clearly, you're seeing margin compression. the stock has not performed on what's been a tremendous tape
now for the last month and a half, two months. i would say, again, the stock is trying to tell you something. i would rather buy it on a breakout. see if it gets there. i said all along, though, qualcomm was the better play. that stock's done really well since, specifically, this apple decline. >> i would rather be long apple against the s&p here. i would rather be long apple against samsung, because on the risk reward basis, look at where the s&p is, where apple is on a valuation basis. this is, to me, totally a reversion to the mean trade. this is nothing more than a nine-month look. i'm not even making a call, necessarily on apple, which i think is a great company with a multiple that seems to be getting cheaper. but look at samsung. if samsung, if apple is not working, samsung is not going to work, either. >> there are a couple of things that apple could do tomorrow that would move the stock higher. announce a return to capital to shareholders, and b, they could announce a five-inch phone or a cheaper phone and that would rally the stock. the problem against samsung is that they have a bigger phone that everybody wants, all they
have to do is, say, we have a five-inch phone coming down the pipe. >> apple is probably good for a trade here. it had a nice reversal today. use $440 as your stop. it's a different investor getting in the stock for more of a dividend or for a buy-back or for the new, bigger phone. it's a different type of investor. i don't think you have that massive rally like you've had in apple, but you can be in it for a trade, in my view. >> e ya, here's the thing, right. you just talked about the catalysts. the buy-back or raising the dividend. these are not the reasons that people who own apple from $400 up to -- >> fine, take that off the table in. what does it say -- >> they will not say it tomorrow because they don't announce products until they are ready to release them. and they are not ready to do this. everything from the supply chain does not suggest that. i'm telling you that these guys have a product problem. they refreshed every major product in that last quarter of last year, okay? and what did people used to buy this stock for? product cycles. and they don't exist right now. if you are going to have a tablet coming off -- >> bar clays came out with a
note saying a five-inch phone is in the pipe and it could actually lift asps by 5% and add $7 to the -- >> the point you're making is the same one we made last week is that apple is going to have 128-gig ipad, they're going to have a product line. to me, this sounds a lot like samsung. it will take time to get the five-inphone out there, but to me, having many different price points will help the share price. >> let's get a market flash now, check in with josh lipton on names that are moving afterhours. josh? >> let's start with chipotle, up strongly in the afterhours. reporting a ig here quarterly profit, despite higher food costs, which clocked in at 33.5% of revenue. increase of 130 basis points. revenue jumping some 17% to $699 million. sales at restaurants opened at least 13 months up 3.8% on increased traffic. looking ahead for 2013, chipotle
forecast flat to low single digit sales growth at established restaurants, that is excluding any menu price increases. investors applauding the report in the afterhours. remember, back in october, hedge fund heavy david einhorn called them an attractive stock. the news for panera, the company came up light on the top line, but looking ahead to the first quarter, they said they are expecting earnings of $1.62 to $1.66, that's in line with the street and would represent a 16% to 19% pop versus the year ago period. melissa? back to you. >> thank you, josh. where do you stand? i know you go to qdoba. >> i haven't been in awhile. i had it at the airport. >> cmg? >> it's an opportunity to sell it again. i'm sort of in the einhorn camp. the quarter was okay. so, yeah, i think -- let the froth happen tomorrow, then i'd sell into it. >> and they may not raise their
menu prices. if you get food inflation, which you could see coming, they could be vulnerable. >> i was just going to say, they just preannounced, because of higher costs of food here, because this is a story that growth is decelerating massively. you know, it's up 3% in the afterhours, it was down, you know, 1.5% during the day. i would say this is a pretty treacherous setup to try to get in there. >> 36 times earnings, a short squeeze here. sell this movie. especially sell it at 325 where it does not get through to 200. >> big movers of the day. drop here for petro. tim? >> third highest volume day ever. this has been one of the biggest lose earls in the last couple of years. you have a shot here. wait until 16 bucks. >> pop for archer daniels midland, up 3% -- now b.k., this was your short idea in final trade. >> it was. and i picked this pop and drop so i can fast fire myself here on adm. so, up 3% today, what i missed on this was their soybean crush
margins were much bigger than what i expected. >> bigger than what i thought, too. >> how did he miss that? >> he's taking that out on you -- where do you go with that? >> it's my own fast five. how do you trade it now now that it's up 3%. still stay short or you can get short here. use today's high as your stop. i still think they're going to have a problem innette noll and the mississippi river isn't getting any higher. >> that's graceful self-plaid lake. g guy, diamond offshore. >> if it gets down to 72, i believe, it's another opportunity. a lot of analysts made comments. i like it overall. >> electronic arts up 5%, dan. >> the company disclosed that the ceo bought $500,000 worth of stock -- >> it's in the game! >> it's in the game, there you go. here's a stock that was literally -- it's up 50% some from the summer lows and the ceo is getting in there and buying stock.
>> and a pop here for house plants. >> huh? >> one company is turning over a new leaf when it comes to app design. also technologies has made an app letting house plants talk to their customers letting them know when they need to get watered. the plant whisperer project was founded by grossroots kick starter. >> best part of that thing, that's one of clapton's best tunes. i know what you're talking about -- >> i hear it. >> great job by lydia, who is making up for saying -- >> was he singing about house plants? >> no. >> stop. >> he was not. don't even try to go and mess with clapton. uncool. why did they shut the song off? >> i don't know. >> your apartment looks nice, guy. >> ha-ha. >> sweet. >> nee, coming up next, more afterhours action. disney shares going higher. earnings fell, but still beat analyst expectations. we'll have the latest from the conference call. plus, why tech stocks are among the market's worst performers. we are getting answers. but first, why blackberry's
recent rally is creating such tension on this "fast money" set. guy and dan go at it in an good old fashioned street fight. that's next. m e their money do . (ann) to help me plan my next move, i take scottrade's free, in-branch seminars... plus, their live webinars. i use daily market commentary to improve my strategy. and my local scottrade office guides my learning every step of the way. because they know i don't trade like everybody. i trade like me. i'm with scottrade. (announcer) scottrade... ranked "highest in customer loyalty for brokerage and investment companies." how sharp is your business security?o! can it help protect your people and property, while keeping out threats to your operations? it's not working! yes it is. welcome to tyco integrated security. with world-class monitoring centers and thousands of qualified technicians. we've got a personal passion to help your business run safer,
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welcome back to "fast money." i am jon fortt with a little bit more on the hp breakup rumor story. the official word from hp is that they are not commenting on rumors and speculation. a source close to the story tells me hp, at this point, plans to keep all of its businesses together. so, make of that what you will. guys? back to you. >> jon fortt, thank you for keeping us updated. blackberry shares seeing a resurgence of late. the stock is up triple digits, as the smartphone maker gets ready to roll out new models here in the u.s. but blackberry shares are still seeing some red. the situation sparking a good old fashioned street fight. guy tonight, battling for the bulls, dan nathan siding with the bears. you have 90 seconds combined. that's important. to present the case. guy, go ahead. >> you know, strange that i like rim here, but i do. the management is lousy, but the stock is interesting here. they have a tremendous balance sheet. $3 billion in cash equivalence. the valuation, next to their
peers, is very interesting. they might license some of their software. a lot of analysts think it's worth $13, $14 alone and the momentum is behind it. plus, you throw this dell thing in there, maybe the folks at rim start thinking -- >> they might go private? >> stranger things. >> i can't disagree with anything guy just said. to me, the stock has problems in the high teens. just the other day, on friday, i was looking at long trade structures through options, the stock dipped below 13, 11, 12, is an area where the sum of the parts, where that cash balance, a lot of things make sense, but to me, right here, the day traders have that stock, okay? and the sentiment has shifted massively about these phones. they are not coming out in north america until april or may, the company just said. that is an eternity in this wireless space. to me, they have to get this thing right. if they do not, it is lights out for these guys and you will see the stock back at $11. and the thing that worries me about the day traders in this stock is that investors are going to get caught quakely on
the wrong side of this thing. i don't believe they're going to turn this thing around. i think the phone is going to be a disaster. >> i could take issue with one thing. you can't take issue with a single thing he said? come on. bring it on. >> well, i mean, listen. >> seriously. >> at the end of the day -- >> there are no sparks here. >> soft answer. >> i can't disagree with anything. this is a debate, guys. >> and we're having it. >> they didn't yell at each other. i was around. >> okay, so, that was -- >> cogent points, incorrect, but cogent, nonetheless. i'm kidding. to me, it's a buy their thing. you can make an excellent point. but my sense is, there's a little mojo behind the stock right now. >> i need to make one really important point. research in motion, blackberry, they have 30 million enterprise users right now. those are people this company is really relying on. we know this in new york city with the huge banks that have
tens of thousands of blackberries. they are starting to let their employees use their own devices and they are slapping on vpns on these things. this has the chance to really crush this company over the next year. >> i don't get the licensing of the software. who is going to do that at this point? nokia is with microsoft. >> intelligent thing to say. i'm kidding around. >> where do you go, beeks? >> i'm going to stick over here with my man dan. though we disagree with this during the day, the problem with rim, or blackberry, is they have no execution whatsoever. they have tremendous potentials. they have an installed base. they have -- >> whose side are you on? >> i'm on his side. >> he said dan! >> they don't have the management. i wake up tomorrow and meg whitman is the held of this cheap, you buy -- >> i'm going to go to the ultimate arbiter, that is dan niles. let's go to him on the fast
line. he's going to talk about all plays. dan, i'm curious. bull or bear when it comes to blackberry? >> i don't see how you can't be a bear longer term. the way -- think about it in reverse. you don't buy a phone to make phone calls anymore. you buy them to run applications. and if you are a software developer, you build applications for where the market is. and the most profitable market is for iphone, so, it's on apple. the next one is on android. if you're even thinking maybe i'll spend some time going to a third, just because the amount of money microsoft has to throw at it, you may put a little bit of effort into that. and that's really the problem with rim. it is trying to get -- they don't have the big checkbook that microsoft has to just pay people to port it. that's the issue i have with it longer temple. and as one of your panelists pointed out earlier, corporations are letting employees bring in iphones into the workplace. it just makes it a very tough
situation long-term. >> i'm glad you were able to weigh in. so, guy, you lost. >> i lost. that's fine. thanks, dan, jerk. >> he's joking. >> i don't want to get dragged into this. >> all right. dan, let's talk about technology as a whole. as we've seen, the markets overall rally, we have not seen technology participate. i'm just curious, your take on what that has happened and if there has to be a natural catchup rally for tech. >> i don't think there needs to be a catchup rally, what you can think about is last year, you could argue tech overperformed, given the fundamentals. investors ignored apple missing the june quarter. that's fine. stock goes up. they ignored missing the september quarter. that's fine. drive the stock up some more. to some extent, you are working off some of the excess optimism that existed last year while a lot of technology companies weren't making numbers. so, i think that's more what's going on this year. having said that, i think there are some interesting pockets of
growth, you know, we have several spaces that we like that have been out of favor for awhile. but i think you really do still have to be careful about pc-centric names going forward, because i think they're just going to be under pressure. >> so, pcpc-centric names like hewlett-packard. you still see tablets and smartphones winning for this year. you do like apple. i'm curious on your take if it has whether or not put in some sort of bottom or floor. >> yeah, i mean, we haven't liked this name for a bit, because we had real issues with the form factors and the expectations. we don't -- here's the issue. on the conference call, they told you, we're not going to make cheaper phones, so, that locks out a good portion of the emerging markets. they told you, we think we have the right form factor. they don't want to make fatter phones. samsung is making a lot of money selling the galaxy s-3. those are the problems. the good news is, if you step back, apple is moving into the
enterprise and they did, though, tell you on the call that they believe they can do something of substance in the tv market. so, i think you're going to see something in that coming out, brand new revenue stream for them. so, we actually, you know, just started buying it at that 450-ish level, thinking it's gotten washed out here. i still don't strategically like the fact they are ignoring the low end of the phone market or the bigger screen size. but as we saw with the ipad, right, steve jobs said, we're not going to make a smaller screen ipod and there it came. so, the market's there. >> dan, it's tim. so, you have samsung and apple as names you like or own. and i look at samsung here, i think despite the fact they're in the lower price points and i see what they're doing and they're well ahead in china, but the competition with htc and some of the other hardware guys is intense. don't you think samsung is a sell against apple here? i don't know how you guys trade
your book, but isn't that a decent trade at this level? because samsung really hasn't responded. if apple is having margin pressure, so is samsung. >> i understand your point. this is the good news. apple's come in a lot. it took three quarters of misses, not just two, to convince investors there was an issue there. you're absolutely right with samsung. they are doing well. if you wanted to try to hedge, you could. i think samsung is going to continue to do well, because they're view is, we don't know what the consumer wants, so, we're going to build a lot of different great products. you want a fatter phone, we got one for you, you want a smaller one, we have one. that's why our kind of stemealt play around all of this is qualcomm. you look at qualcomm, they don't really care who wins, they just want to supply everybody. and so, if that case, to your point, whether it's samsung or apple, it really doesn't matter, because qualcomm, you know, makes money selling chips to all these players. i think, before it gets lost in the shuffle, the one derivative play which is more exciting than anything we've just talked about is in the tell come world.
if you think about what we're mentioning, all these smartphones are pulling down data at incredible speeds. and it's clogging up the networks as they are running through lte. the telecom companies, the ciscos of the world, their businesses have been absolutely horrible since the fourth quarter of 2011 when the government broke up the at&t t-mobile deal. since that period of time, you fast forward, you've had now saying they're going to take out sprint, and you're going to see a big pickup in spending. so, companies like a cisco or juniper, a lot of the optical names that we own, that have been in the dog house for the last couple of years, they should see a big resurgence this year and semiconductors is another space where, you know, we've had revenues this year worst than they were two years ago, so, in 2013, sorry, in 2012 -- 2013, you are going to start to see growth again and that's another space that we like that's been in the dog house for the last couple of
years. >> dan, thank you for phoning in. appreciate your time. dan niles of alpha one. and his pick in the semispace, onnn. in terms of picks here, the ones that dan outlined -- >> qualcomm. he said it. when there was rumors of apple going to the low end, the rumors are they would use qualcomm snap dragon, this is a company trading at a market multiple, 15 times earnings, it is probably the best growth play in all of tech. >> all right, still to come, disney shares trading higher afterhours, though first quarter earnings fell. we'll give you the latest. plus, how hedge funds are playing down 14,000. more "fast money" straight ahead. [ male announcer ] ok, here's the way the system works.
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check on shares of disney, moving higher in the afterhours six. the shares opened at these levels, it would be fresh record highs for the company, posting better than expected earnings. we're monitoring the conference call and here's the latest from los angeles. julia? >> thanks melissa. bob iger kicked off the conference call, talking about the announcement he made earlier on cnbc's air, talking about the fact that the studios working on additional new "star wars" films in addition to the three they've announced. that is going to excite fan boys, as well as investors who are looking for disney to make the most of its investment in lucas film. the overall message in the conference call is that disney is confident on the year ahead and being able to move forward with growth in the year ahead. there was a lot of talk about the cable division, media networks is disney's biggest division. they say their growing fees for cable channels. they closed 7 out of 10 agreements and that we will continue to see an increase in cable fees. now, as to advertising revenue,
they say that advertising is increasing, it's above the upfront levels. they did, of course, see a big bump in the past quarter because of political advertising, but it sounds like the increase will continue. they also noted that abc has sold out the oscars. that is news. and that advertising at abc family is growing. now, in terms of parks and resorts, they talked about some increases at both disney land and at disney world, but the real upside is coming from the investment in new attractions. it sounds like it is paying off in droves. melissa? >> thank you, julia. of course, the media networks and the parks and resorts, 76% of revenues for disney. so, a big upside there. and beeks, i know you are a fan boy, so, you are looking forward to the movies and you love the theme parks and you are waiting to go and use the my magic bracelets -- >> i've got one on. very excited about all those things that you mentioned though i don't know what any of them are. but when it comes to disney, i'd be very carefully, just technically with this stock.
it had been on a tear. it is starting to go almost straight up here. i would not be buying tomorrow and look for reversal date tomorrow. >> yeah, i kind of agree. i think the good news for the stock price was that people were overly negative at what was going on at espn, the renewals with the nfl and nba. this is something that i thought was going to be publicly contentious and something that works to their advantage. they're the only game in town and i think their market share goes higher. i do agree -- this is a stock chart that looks very scary. it going to be tough to beat expectations. >> shares set to open at fresh record highs tomorrow. now to the equity markets. approaching record highs. let's get the smart money trade. anthony is the managing partner at sky bridge capital. hey, anthony, good to see you. >> good to e so ysee you. >> what are they doing? >> i canvassed our research team to get a flavor of things and the decided opinion is that guys are getting long equities and
they are getting long equities in size. so, the dow 14,000, the theory is we're going to go to 15,000. there are three names in particular that seem to be on hedge fund inventory right now on the long side. that would be bank america, hartford financial group there and i'm sorry, aig. those three names, all in the financial services area, all increasing in terms of their dividends, very, very good fundamentals there. i think goldman sachs a few weeks back, upgraded hartford to their buy list. reducing beta there. the price target at goldman was 29. but those names seem to be in the inventory of the stuff that we see. we're tracking over 1,000 hedge funds at sky bridge and so, listen, guys are getting long. >> sure. >> low exposure is not for 2013. >> yes, steeper yield curve really factors into all three of these names.
>> no yquestion. >> you mentioned apple and whether or not hedge funds still own the stock and you mentioned that they were, that it was well owned by hedge funds and they would probably be cycling out of it. i'm wondering what the view is at this point now that it looks like apple may be gaining sort of a footing here. >> well, you know, what we were talking about last week, melissa, apple, there's been a rotation into what i would call growth at a reasonable price, given its multiple now. i do predict, as they raise dividends there, you'll get some yield buyers, as well. but apple has been consistently on the list, and the reason why i didn't mention apple in this segment is because it's sort of a foregone conclusion that it's very heavily owned in the hedge fund community. trying to give viewers a different group of inventory, but i think apple is still on that list and i would not be a seller of apple here. not at these levels. >> okay. and anthony, we have to mention, because it looks like house speaker john boehner is a big fan of yours, because the website buzz feed wrote an
article on the ten most interesting things on john boehner's desk and spotted right there, take a look -- "little book of hedge funds." >> speaker baner is a man of his word. when i met him in his office, i gave speak eer boehner copies o my books. i said, you don't have to read these, but display them prominently somewhere in your office and he did promise me that and so you can obviously see they're right there on his desk. and they have a great view of the capitol, those two books, so, i'm very grateful to him. >> must-read books. you notice there was a box of tissues there, which leads me to leave after reading, he just -- >> guy, the scented candle. i recommend to readers they use the scented candle that's on his desk to read the book. >> in a hot tub. >> that's almost too much to imagine, anthony. >> yeecreepy as can be.
>> good to see you, anthony. you guys -- >> i didn't bring -- i brought up tissues. >> and the hot tub. >> scented candles? >> let's just leave it. >> my fault. always my fault. >> always. when to cult your losses and cash in your winnings. a round of hold 'em or fold 'em is on your way. more "fast" straight ahead.
sometimes it is tough to buy the losers and sell the winners. so, let's play a little hold 'em or fold 'em. first up, church and dwight, soaring to a record high on blowout rev nufs, announcing its 2013 -- >> rhetorical question, i'll tell you right now. first of all, wise guy, hold 'em is the answer. >> obviously. >> the quarter was outrageous. we've been -- >> hold 'em. >> that's a new graphic they have or -- >> i think that's audio. >> new audio. >> hold 'em! >> what transpired in new orleans, sales are going to go
through the roof. hold 'em. >> after new orleans? >> the super bowl, blackout. you know what happens. >> 38 minutes -- >> i'm just saying, that's all it takes, 38 minutes. for some. >> anyway. i'm moving on. next up, yum brands, dipping to a 52-week low. the impact of government probe into its chicken suppliers in china will continue to weigh on sales in the first quarter. tim? >> hold 'em. hold 'em at these levels. 15 1/2 times 2014 -- >> hold 'em! >> whoa! hold 'em! how did i do on that? >> great job by you. >> they are under significant pressure in china because they sold the china story so big to investors. they have the same thing in front of them as india. this is a separate business for them. and they are going to start to see it. time for this company to come on back. this is a time to buy it. 60 bucks, this stock goes all the way back a year and a half. >> okay. let's move on here. remember the european debt threat? well, it is resurfacing. just how big is the risk to this
rally? let's take a deeper dive with larry mcdonald from new edge. larry, investors typically forget, but this time of year, it's pretty tricky when it comes to the european debt crisis. >> you think about the last 100 years, the great financial panics of 1907, crash of '29, famous panic of 2008 with lehman. there's typically a ten-year period of normalization. investors around the world are still scarred. so, what happens here is, you have a period where investors have an easy quick hand on risk off. and each time, 2010, '11 and '12, credit spreads widened in europe. bulls fought it and then we rolled off hard. these guys do a great job analyzing stocks. you have to focus so hard on managing stock positions. you've got to do deep company specific research. what happens is, as the mac mac
picture fades away, people stop focusing on it. now, it's creeping back in with this political risk. >> this is a shocking chart, actually, because here, march, 2010, march, 2011, march, 2012, and here we are in march 2012 and that's why you are saying investors should be aware of what is going on in europe. when we saw yesterday the yields in spain and italy start to blow up, we saw financials really roll over pretty hard here, so -- >> yes, and what's happened each year, credit spreads on the sovereigns widen. each time. each time we had the big risk and each year, the sovereigns widen. that leaks over to the officials in europe. corporates in europe and a week or two later, it hits u.s. financials and then u.s. equities. now, we're about 30%, 40% through that cycle this time. we had a massive blowout in italian yields. 40 basis points? on $2.4 trillion of paper.
that is a come los sal move. so, in this case, you've seen the leak over into subordinated financials in europe. so, the banks, in europe, have felt it. so far, the banks in the u.s. have not felt as much. >> b.k.? >> i'm with you on this whole europe being a problem, but the retort to all of this is that europe's fixed. the omt, that's -- that makes europe safe. where do you stand on that? >> the interesting thing in that dynamic is, spain and italy, in the next 30 days, we are a massive corruption scandal in spain. m potentially knocked out of office. in italy, we have -- >> elections. >> elections. and a rising berlusconi. and the last time he was in office, we had 7% yields and a has si pu massive pull-back. the problem is, it all comes down to this sentence. when he says i'll do whatever it takes, he differedn't think he going to have new governments in spain and italy seven months
later. >> so, larry, give us the bottom line here. if i look at this chart, i hear what you are saying. you are set u.s. financials have yet to roll over, it makes me want to sell this rally. what are you telling clients to do? >> i would sell this rally. but out of my 17 risk indicators, a lot of the sentiment indicators are screaming sell. but now, the systemic ones are starting to. >> all right, larry, good to see you. tim, what do you make of this? >> i have to agree with larry. whether this is complacency we're in right now or a place where people see political fear, so you should be buying, i think larry is right on both sides. i don't think the market is terribly complacent here. people are very nervous. we saw that yesterday. it doesn't take a lot to get people to get on the trigger. i think europe has major problems. i would be very cautious here. >> all right, coming up next on "fast," a selloff by the book? a look at the drivers behind mcgraw-hill's plunge today and if early signs of a rebound are emerging. and coming up, jane wells tackles the west coast.
jane? >> melissa, being the west, we're going to talk about weight loss, botox, wasting time online and saying dude. after the break. ith fidelity, but we can still help you see your big picture. with the fidelity guided portfolio summary, you choose which accounts to track and use fidelity's analytics to spot trends, gain insights, and figure out what you want to do next. all in one place. i'm meredith stoddard and i helped create the fidelity guided portfolio summary. it's one more innovative reason serious investors are choosing fidelity. now get 200 free trades when you open an account. all stations come over to mithis is for real this time. step seven point two one two. verify and lock. command is locked. five seconds. three, two, one. standing by for capture.
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mcgraw-hill plunging again today after news that the department of justice is filing a lawsuit against credit rating agency standard & poor's. mike khouw, what did you see in the options pits here? >> well, just like the e kwity, there was a lot of volume in the options. they traded more than ten times their average daily volume by halfway through the day. a lot of calls trading, but many of those were being sold. one of the notable trades that i saw, a purchase of the may 42 1/2 puts. the stock was over 47 when this trade took place. somebody paid $2.40 for those. over 1,000 times. that's a bet that the stock could fall more than another 15% from where it was. of course, it did decline as the day progressed and the sentiment in the options market is bearish. the kinds of liabilities are very large relative to the size of this business. >> guy, you would actually go in despite the fear in the market. >> yaem. i think you were on, david faber had a great interview and it's -- well, it's a frivolous lawsuit. there's no -- i don't -- there's nothing there. other than the government wanted to take a pot shot at somebody.
it's interesting, though -- >> are you in the conspiracy theorist camp? you don't think the government is smacking down -- >> well, sort of. there are other people out there. not just s&p, right? >> s&p is the only one that downgraded the u.s. and now we're on watch negative, bias and -- >> so, you are making your argument -- >> i'm not asking, because you are a conspiracy theorist kind of guy. >> it typically trades five or six. you know, what's interesting in this stock, not a big short interest. maybe shorts poured in today. i think it gets 42, which is the low we saw back in july. >> all right. from mobile devices to medical marijuana, we have you covered in the west coast wrap. jane wells joins us. jane? >> melissa, dude, you're getting an lbo. michael dell, taking his company private to try to bring back these glory days. watch. >> dude, you're getting a dell. >> that was stephen, receiving dells back in 2001 when you could get six months of dialup interview for $999.
actor ben curtis hasn't done much after being fired. hey, that's maggie grace from "lost." now curtis wants his old gig back. he said, guys, go crazy if you want me back. but he gave outherong account. dude. >> you don't know how you trade that. i like the "lost" aspect of it. at the end of the day, this company doesn't have a shot of ever becoming cool again, so, i don't know -- >> nor does ben curtis. sorry. >> less of a shot if they bring him back. jane? >> exactly. i mean, come on. he's better than jared. >> not the same. >> stop. >> speaking of losing weight and he did a great job, jared's kept the weight off, we're so happy for him. >> i'm not sure. anyway. >> weight loss business, which is putting a lap band around growth. hopes to sell off the segment in the first half of this year. earnings reported this morning
missed expectations, but botox sales grew 14% thanks to new uses to fight migraines. >> yeah, the lap band hasn't been the same since rex ryan got involved and i'm not a fan. >> your headaches are better, huh? what does that mean? >> listen -- you're a fawny man. jane hasn't seen any botox. jane is hot as it comes. this stock, at 22 times, a little rich for my blood. hi, jane. >> i think i'm going deaf. you sound like charlie brown's teacher. but i did hear jane is hot, so -- >> that's all that matters. >> tired of baby photos and sharing funny george takei quips? 61% of facebook users have taken breaks from the social network site lasting at least several weeks. some because it's a big time suck, some because they are tired of the drama and some are giving up for lent. that is a sacrifice. >> tell me about it. it's about that time of year for me, quit drinking and i'm not -- >> you can do --
>> gave it back later in the year. >> got to do it. jane, you are going to quit drinking for lent? >> i can't -- sorry. >> you are hot, though. >> i heard that. >> bye, jane. see you later. still ahead, our favorite tweets of the day. we will trade them. back right after this. ♪ [ cows moo ] [ sizzling ] more rain... [ thunder rumbles ] ♪ [ male announcer ] when the world moves... futures move first. learn futures from experienced pros with dedicated chats and daily live webinars. and trade with papermoney to test-drive the market. ♪ all on thinkorswim. from td ameritrade.
the s&p 500 is 3% away from an all-time high. is there still more room to run? let's go off the charts with dan nathan. >> i'm not listen much of a charter. i'm going to take a stab at this. a lot of excitement that the dow jones industrial average is trading -- about to make new all-time higher here. it think it's a relatively u useless guide of anything. price weighed stocks here. but to me, i want to look at the s&p 500. this is a much broader index. when you look at that chart, i think that is of the dow. when you look at the s&p 500, this thing has come up to 1600 on almost three occasions now, and to me, if you were buying
stocks here, because you think you're going to get an epic breakout here. you have another thing coming. for this to keep going through this at some point this year, it needs to base a little bit or it will be rejected up there. to me, you have to be careful putting new money to work. >> triple tops equal danger. >> listen, that's unprecedented here. if you look at the s&p, that was the history of the s&p. when you get up there, 30%, 40%, 50% drawdown from the hikes. i don't think the risk/reward is in line. >> serious will robinson right there. that's what i'm talking about. you don't know about that. >> i don't. we have to move on. you tweet it, we trade it. >> go. >> get to the viewer tweets today. start with beekers. stan is asking about tbt and tmv. >> my final trade last night was to buy tlt for a trade. for now, i say don't do tbt, buy tlt still. >> dan, this is for you. josh asks, how would you play pfizer. would you ever consider a deep in the money call? >> i wouldn't consider it. when you have a stock paying a
dividend like this, a defensive name, this is a stock you want to own, but if you just want the price appreciation, that's one way to do it with defined risk. >> and guy, this is for you. steve tweets, hi, with an exclamation point. wonder if coal is dead, particularly arch coal or is there some hope long-term? >> it was a disasers of a quarter. the only good news, 35 million trades, seven times normal volume. there's still better places to be if you want to play coal. play it with the rails. we talked about it for awhile. ksu. >> and tim, jared tweets to you -- >> jared? what's up buddy. >> finally people are starting to realize apple is too cheap. maybe buffett is watching? >> well, jared, come on. apple is cheap. 10 1/2 times is very tough. but buffett jumping in to be a savior this is not goldman sachs in the middle of the crisis. no way. >> way to tell jared. got your first move tomorrow when we come right back. stay tuned. oh this is lame,
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